Reading Ashoka Mody’s book, India is broken – A People Betrayed, 1947 to Today can be a dispiriting experience. The book’s sub-title sets its tone.
This book is a vast canvas that paints the economic and political story of independent India and it’s not a pretty picture. From Jawaharlal Nehru to Narendra Modi, the author spares none. It is a story of missed opportunities and wrong turns. It is the story of a society whose moral fabric is tearing not just at the edges but getting ripped right at the middle.
The vast canvas covered starts with the Nehruvian big industry strategy and ends with the devastation wrought by Covid’s deadly second wave – with the epochal events like bank nationalisation, Emergency, Punjab militancy, Ram Mandir movement, 1991 reforms and after – weaved into it.
Big push, small gains
The futility of Nehru’s big industry, big dam strategy, argues Mody was clearly unsuited for India as it was never going to create jobs at scale.
Nehru’s neglect of primary education and healthcare hurt India hard and Mody describes, that the foundation of the East Asian countries’ success was premised on expanding primary education and healthcare.
Nehru’s socialism was nothing but a maze of controls that gave oligopoly power to big industrialists.
Lal Bahadur Shastri attempted a course correction during his all too brief tenure by moving away from heavy industry and focusing on agriculture and ushering in the Green Revolution. He was also trying to lay the ground for devaluation, but faced stiff political opposition.
Indira Gandhi, initially spent too much time fighting growing dissent within the Congress and lacked an economic vision, says Mody. About the bank nationalisation saga, Mody argues that it was Indira Gandhi’s political compulsions in checkmating the Congress Syndicate that drove this decision that had little economic logic.
The ban on corporate donation to political parties, Mody rightly says, paved the way for “suitcase politics” and worsened corruption. The growing economic crisis in the early seventies fuelled protests (Gujarat, Bihar Naxalism in West Bengal) and led to growing authoritarianism and finally the Emergency.
Emergency, a dark chapter
The section on the excesses of Emergency – forced sterilisations, slum demolition, police brutality, Sanjay Gandhi’s lumpen politics – is the most depressing part of the book. Mody rightly says that even after Emergency ended its scars still remain as it fundamentally broke Indian democracy.
The brief Janata interlude undid some of the excesses of the Emergency but little else.
Growing political unrest
Indira Gandhi’s triumphant return to power came under the shadow of severe economic distress.
But this was also a period marked by growing political violence and the debilitating Bombay textile strike led to a further deindustrialisation just when China was beginning to take off. The utter neglect of human development also unfortunately continued.
Rajiv Gandhi’s reign led to a brief moment of optimism. Texas Instrument’s investment in an R&D centre in Bengaluru marked the beginning of the city emerging as a global IT hub. But Rajiv’s opportunistic brand of politics put paid to this optimism and unleashed the “gale force of Hindu nationalism”.
The fiscal profligacy of the late 1980s led to full blown BoP crisis by 1991. The IMF bailout and the reforms that followed thankfully gave the licence-permit Raj a quiet burial. FDI rules were eased and financial sector reforms were unleashed and the rupee was on free float. Though these reforms were path breaking, Mody says they were not fore-grounded by a social democratic agenda.
So reforms created pockets of prosperity and kept large sections of the workforce from reaping the benefits of reforms. The IT sector, despite its resounding success formed only 2 per cent of the GDP and employed only a fraction of the vast workforce.
During the boom years, 2004-11, fuelled by the finance and construction, Mody credits India’s efforts of bringing down poverty but still an unacceptably large percentage of people were economically precariously perched. This high growth period was riven by extreme farm distress with a stubbornly large section of the workforce still wedded to agriculture.
Even reforms and high growth could not spark a boom in labour-intensive manufacturing so crucial for creating mass scale jobs. Mody says even nations like Bangladesh and Vietnam surged ahead of India.
The early promise of reforms was snuffed out by the mega scams of the UPA-II, propelling Narendra Modi to power on the hollow ‘Gujarat model’, which Mody argues was premised on massive largesse offered to India Inc.
Demonetisation and a botched-up GST implementation aggravated long-term structural economic problems. NDA-II’s political agenda post-2019 – scrapping of Article 370, CAA – pushed the economy to the background, worsening environmental degradation and urban decay.
So, the economy was in poor shape even before it was hit by the Covid sledgehammer. By evenly spreading his searing critique across the political spectrum, Mody passes the “neutrality” and “objectivity” test, so dear to the commentariat.
For Mody, the solution lies in deepening democracy by devolving more economic and financial powers to local bodies, complemented by a strong civil society movement. In the current milieu of “prickliness”, Mody’s no-holds barred attack on Indian policy-making will raise more than a few hackles.
The book is written in a lucid style but its hard and uncomfortable truths can make readers wince. And that’s precisely why this book must be read.
Check it out on Amazon.